DUBAI — A new initiative to transform Dubai into a global hub for sukuks is aimed at positioning the UAE as a top-ranked economy in the world, His Highness Shaikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, said on Wednesday.

Speaking to journalists at the launch of a bold initiative ‘Transforming Dubai into a Global Centre for Islamic Bonds’ at the Dubai Financial Market, Shaikh Mohammed said the UAE, under the leadership of the President, His Highness Shaikh Khalifa bin Zayed Al Nahyan, “seeks to maintain its position as the overall top-ranked economy through such projects and initiatives”.

Shaikh Mohammed rings the bell in the presence of Shaikh Hamdan, Mohammed Al Gergawi and senior officials at the Dubai Financial Market on Wednesday. — Wam

“Transforming Dubai into a global centre for Islamic sukuk is intended to cement confidence in our economy among international financial circles,” Shaikh Mohammed said.

“Today, we lay the first stone to realise our vision of transforming Dubai into a global capital for Islamic economy. We are optimistic to achieve this goal and we endeavour to activate it through a series of initiatives and programmes which in turn will activate the role of Islamic economy in our national economy.”

Shaikh Mohammed added: “Today, Dubai possesses all the potential and privileges that qualify it to achieve its goal of becoming a global centre for Islamic sukuk. We will work on completing the necessary organisational framework and mobilise efforts and energies, national cadres and experts to give this sector the anticipated momentum.”

Shaikh Mohammed viewed a presentation about the new initiative and its objectives in the presence of Shaikh Hamdan, the members of the Higher Committee for the Development of Islamic Bonds in Dubai, senior officials from the Dubai Financial Market, the Dubai International Financial Centre and the Securities and Commodities Authority and several experts and specialists in Islamic financial services.

Minister of State for Cabinet Affairs Mohammed Abdullah Al Gergawi, Minister of Economy Sultan bin Saeed Al Mansouri, a number of key officials, bankers and businessmen were also present to witness the launch of the initiative, the first action plan following Shaikh Mohammed’s January 9 declaration to develop Dubai into a centre for global Islamic finance.

The new initiative aims at creating a hub for issuing, listing and trading of sukuks while also encouraging organisations to issue sukuks instead of bonds.

Shaikh Mohammed’s January declaration envisaged proposals to create an Islamic finance council to regulate Shariah-compliant equity — and integrate Islamic economy as part of the overall Dubai economy.

With principles of Islamic economy playing a growing role in today’s global business environment as its size reaches $2.3 trillion, Dubai’s new drive is expected to reinforce its clout as a fast growing global financial hub. The UAE, thanks to its enviable high degree of expertise and experience, as a whole is well-positioned to serve the ever-increasing worldwide demand for innovative, high-quality, Shariah-compliant products and services.

Islamic finance experts said the new framework for promoting Islamic economy would further strengthen the open and integrated approach of Dubai in doing business. It is expected to lend further momentum to Dubai’s well-diversified economy, which is on a fast-growth trajectory, propelled by the robust performance of core sectors including trade, retail, tourism, aviation, hospitality, financial services and logistics in 2012.

While Dubai’s cosmopolitan outlook to doing business continues to be its economy’s driving force, adoption of a modern and scientific framework for Islamic economies worldwide will certainly better position it to meet the demand from local, regional and international investors for a central hub to invest, grow and do business, experts argue.

As Dubai remains firmly committed to pursue its principles of openness and commitment to a free market economy, it seeks to support the entrepreneurial community, especially from the Arab world, through the strengthening of Islamic economic principles.

Dubai has also initiated the development of commercial standards for Islamic industries and guidelines for Halal food manufacturing. Dubai seeks to develop Islamic quality standards for Halal food approval. This will encourage the food industry and promote linkages with global and regional businesses, as well as different business sectors, including transport, storage and handling.

Islamic banking experts are of the view that Dubai has in place basic ingredients to emerge as the capital of Islamic finance. These include advisory, regulatory, legal structure and workforce. Besides there is a range of other factors which are also relevant for the creation of a general financial centre — many of which Dubai already has. The Shariah-compliant banks account for 15 per cent share of the banking activity in the UAE.

When asked to comment on the initiative, Afaq Khan, chief executive officer, Standard Chartered Saadiq, said: “Dubai is an established financial hub both for the Middle East and internationally. The initiative announced by Shaikh Mohammed will provide further impetus for Dubai to raise its prominence as a centre of Islamic finance. The need for improved infrastructure in Africa and the Arab Spring countries will create greater demand for capital raising in the future, including through use of the sukuk. Dubai is in a strong position to capitalise on this demand as a global capital markets hub.”